"Prime is arguably the most valuable and important growth trend for Amazon, representing around 50% of company GMV today. At an estimated 32m customers (13% of total, growing at around 45% Y/Y) and high GMV but low contribution margin, the mix shift to Prime is critical to the AMZN investment thesis. Prime’s value to Amazon is simple: 1) it creates a competitive moat around AMZN’s e-commerce business, 2) it drives up loyalty and 3) Prime increases wallet share and captures higher customer LTV," said Sandler.

"We think Prime could reach 100m members in 2020 and alone could be worth over half of AMZN’s market cap. At 18x 2015 EBITDA vs. the historic 3-year average of 21x, we continue to view AMZN’s risk/reward as favorable," he added.

For an analyst ratings summary and ratings history on Amazon.com click here. For more ratings news on Amazon.com click here.